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Prescription Drug Agreement Reduces Costs by 50% for Seniors

Press Release

Location: Washington, DC

Prescription Drug Agreement Reduces Costs by 50% for Seniors

Rep. Wasserman Schultz hails agreement that will cut costs in half for seniors caught in Medicare Part D - at no additional cost to taxpayers

Today, President Obama announced a historic breakthrough to reduce prescription drug costs by 50 percent for seniors who find themselves in the Medicare Part D "doughnut hole" coverage gap. The agreement was reached with pharmaceutical companies, who pledged $80 billion in prescription drug discounts over the next 10 years. The new benefit is expected to be part of health care reform legislation that Congress will consider later this fall and will likely go into effect in July 2010.

"This is a big breakthrough for seniors who will save 50 percent on their prescription drug costs in Medicare Part D," said Rep. Wasserman Schultz. "One in four seniors on Medicare Part D is caught in the ‘doughnut hole' coverage gap and this agreement can save them more than $1,000 each year."

Part D participants in the gap will be able to access their discounted prescriptions directly at the pharmacy, without filing additional paperwork or applying for the discounts. The amount will be half of the price already negotiated by the Part D plan they're enrolled in. The discount will not reduce Medicare Part D participants' chances of exiting the coverage gap since the full cost of drugs bought in the gap will count toward the out-of-pocket limit ($4,350 in 2009) that triggers low-cost catastrophic coverage. So enrollees will actually pay only half of the amount to exit the coverage gap "doughnut hole."

"Not only does this provide seniors with greater access to affordable prescription drugs, but we've accomplished this without any additional cost to the U.S. taxpayer," said Rep. Wasserman Schultz. "This is a win-win for America's seniors."

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